Consortia - The international committee of bankers on mexico

Formed in 1919, the International Committee of Bankers on Mexico (ICBM)
provides an interesting comparison with the second China consortium. Once
again Lamont was the central figure on the American side, and once again
the bankers demonstrated that they would act independently of other
business interests or the wishes of their government in pursuit of their
ends. The ICBM, however, never loomed as large in the plans of the
Department of State's Division of Mexican Affairs as the China
consortium did in the visions of MacMurray and Hornbeck.

Claiming pressure from European bankers, Lamont solicited the approval of
the Department of State for the organization of an international committee
of bankers in 1918. In 1919 approval to bring together American, British,
and French banking groups concerned with investments in Mexico was granted
by the department, with the proviso that control of the committee's
policy remain in American hands. Swiss, Dutch, and Belgian banking
interests were subsequently given token representation on the committee.

The primary concern of the bankers was to protect the holders of Mexican
securities, especially those of the Mexican government. Lamont and his
colleagues were at best marginally concerned with the primary issue
dividing the U.S. and Mexican governments in 1920: interpretations of
Article 27 of the Mexican constitution and its effect on the claims of
American oil companies. Fearing debt repudiation, the bankers were
unsympathetic to Washington's tactic of withholding recognition
from the Mexican government as a means of forcing it to respect the
property rights and claims of the oil companies. Whereas the government of
the United States wanted all American claims against Mexico to be settled
simultaneously, the International Committee of Bankers on Mexico exhibited
few inhibitions about negotiating a separate settlement of Mexico's
foreign debt.

Restrained initially by the Department of State, Lamont obtained approval
to begin negotiations with the administration of Alvaro Obregón in
1921. In June 1922 the Lamont–De la Huerta agreement was reached,
recognizing $500 million of indebtedness and arranging for eventual
payment. This arrangement paved the way for the Bucareli agreements
between the Mexican and United States governments in 1923, ameliorating
the differences between the two and leading to recognition of
Obregón's regime.

In the years that followed, Mexico had difficulty meeting the schedule
established in the Lamont–De la Huerta agreement, and in 1925
Lamont negotiated a new agreement. Payment remained irregular, however,
and negotiations between the ICBM and the Mexican government continued
throughout the 1920s and 1930s. In 1930 considerable friction arose
between Lamont and the U.S. ambassador to Mexico, his former partner
Dwight Morrow. Morrow and the Department of State insisted that a separate
agreement between the bankers and the Mexican government was contrary to
the interests of both the United States and Mexico. Choosing on this
occasion to understate the connection between the ICBM and the Department
of State, Lamont insisted that he had reached a private arrangement with
the Mexican minister of finance and was not asking for the
department's consent. Unable to sway Lamont or the Mexican
ambassador to the United States, Morrow warned the Mexican government that
the United States did not see the agreement with Lamont as a constructive
step toward financial stability. The Mexican government capitulated,
assuring Morrow it would not submit the agreement to Congress except as a
package comprising provisions for all of Mexico's debts. A final
settlement between the ICBM and Mexico was not obtained until November
1942 in the Suarez-Lamont agreement ratified by the Mexican congress and
the foreign bondholders. Legal problems kept the International Committee
of Bankers on Mexico in existence until at least 1948, when its unrecorded
demise appears to have occurred. It did not have any political
significance after 1930, when it alienated the Department of State. The
department was not kept informed of subsequent negotiations between Lamont
and Mexican authorities.

The International Committee of Bankers on Mexico resembled the China
consortium in that both consisted of groups of bankers from several
nations, brought together with the approval of their governments, but
ultimately indifferent to the interests of their governments or of other
businessmen. The bankers of the ICBM were concerned with their own
particularistic interests: any benefit derived from their activities by
their governments or other peoples was incidental.

The ICBM differed strikingly from the China consortium in its relationship
to the governments of the members' groups. The committee was formed
at the initiative of the bankers, and only the government of the United
States indicated a deep concern for its activities. There were no
international political problems because none of the other countries that
were represented had political interests in Mexico. All accepted American
hegemony in Mexico, in contrast to the response to Japan's claims
to hegemony over Manchuria. The government of the United States had other
interests in Mexico and many other ways to exercise influence there. It
never saw the committee as an important instrument of policy. After the
friction between the Department of State and Lamont in 1930, only the
bondholders cared about the future of the committee.